Multiemployer Crisis Resolution by Committee

Multemployer (union) plans are going broke very quickly and a bailout* is the preferred option for the unions who, for their own reasons, want these plans to continue even if in a zombie state. To that end, as part of yesterday’s budget deal, we got this:

The bipartisan budget deal the U.S. Senate reached Wednesday also will create a bipartisan joint House and Senate Committee aimed at solving a pension crisis that is endangering more than 60,000 Ohioans and 1.5 million workers and retirees across the country.

Sen. Sherrod Brown, D–Ohio, announced the deal after a news conference call with Ohio reporters Wednesday that he twice interrupted in order to take calls from Senate Minority Leader Chuck Schumer of New York. Brown later said he and Schumer were hammering out the final details of the joint committee. Later, Brown went to the Senate floor to thank Senate Majority Leader Mitch McConnell for agreeing to create the committee.

The committee will include three Republicans and three Democrats from both the House and Senate — 12 members total — and will hold at least five public meetings, including one field hearing outside of Washington, D.C., in order to make it easier for the members to hear from retirees affected by the crisis. Members of the panel will have until November to craft a plan that would be put before the House and Senate with an up-or-down votes. Under the agreement reached Wednesday, neither the House nor the Senate will be permitted to amend the agreement.

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* Recent news articles on the bailout nicely summarized by Mary Pat Campbell here.

14 responses to this post.

  1. Thanks, John. And I wonder if they’ll get their bailout bill passed…or if this is just for more grandstanding

    Reply

    • This committee will likely write the bailout bill and after the 2018 election, presuming Democrats regain control, it gets pushed through.

      It’s just a pity nobody bothers to check the 5500 Schedule Cs to see why multiemployer plans are being bailed out while public plans (Prichard, Central Falls, Detroit) are on their own.

      Reply

      • Posted by Tough Love on February 8, 2018 at 12:26 pm

        John,

        Given the FAR greater (in my opinion grossly excessive VS the Private Sector who pays the bills) Public Sector pensions (AND benefits) are you saying that you support a Taxpayer-funded bailout of Public Sector pensions ?

        Reply

        • I do not support any bailout by general taxpayers for any pensions. There are ways to get the people who created these crises to pay for them.

          It’s just that I see bailouts coming for multiemployer plans since the people working on the bailout language have a vested interest in seeing it go through.

          Reply

          • Posted by Tough Love on February 8, 2018 at 12:41 pm

            John,

            I see that too ……. it’s all about votes.

            I’m curious. You said …….. “There are ways to get the people who created these crises to pay for them.”

            I have always considered that the “blame” for the pension mess to lie primarily with our Elected Officials (by trading their favorable votes on Public Sector pay, pensions, and benefits, for campaign contributions, election support and the block votes of Union members) and secondarily with the Public Sector Unions for their insatiable greed (and too hell with the Taxpayers attitude) and their BRIBES disguised as campaign contributions.

            If you agree, how can we get them money back “from them”?

            Given the $$$ magnitude of the problem, from a practical standpoint (while acknowledging that individual Plan participants had little to do with CREATING this mess) the only real source to “pay for this” is by reducing those excessive (in the first place) promised pensions …….. made to the Plan Participants.

          • For a start I would suspend all pensions based on ‘service’ owned while in elected office. After that, it’s a matter of getting the truth out there and hitting these politicians where it hurts – their legacies. Call them all out.

          • Posted by Tough Love on February 8, 2018 at 1:08 pm

            Agreed and appropriate, but given the $$$ involved the ONLY real source if we wanting to get the money back (in actually meaning …. NOT pay the amounts now shown as “unfunded”) is by reducing the never just, fair to taxpayers, or affordable Public Sector pension promises.

      • We shall see.

        And it would be interesting to see =which= MEPs would get the bailouts, because not all of them would.

        Reply

  2. Posted by Stanley on February 9, 2018 at 8:22 am

    Unbelievable! This should be interesting. Talk about grabbing one giant sized tar baby. I wonder if this is a serious scheme or just a way for lefties to play to their constituency. The last time it was in the news Pelosi didn’t sound so convinced that a remedy was possible. Is Brown completely insane?

    Reply

  3. Posted by geo8rge on February 9, 2018 at 9:55 am

    They had a proposal for a loans program, whatever that is. Now it is a commission. Is forming a commission an upgrade or a downgrade?

    Reply

  4. Posted by geo8rge on February 10, 2018 at 2:00 pm

    General Electric seems to be having pension difficulties. This may have issues for the multi employer plans as a solution for GE is more important to the NY CT other economies than the Teamsters are.

    GE’s $31 billion pension nightmare
    http://money.cnn.com/2018/01/18/investing/ge-pension-immelt-breakup/index.html

    Retirees facebook page:
    https://www.facebook.com/pg/geretirees/reviews/

    Reply

    • Posted by Tough Love on February 10, 2018 at 4:07 pm

      “A solution for GE”?

      Hopefully you’re not seriously thinking Taxpayer-funded bailout (beyond the terms if the PBGC) ?

      GE is to a large extent an unusually bad situation pension-wise, and MUCH different than other large US Corporations. On average when both are valued using identical assumptions & methodology, large US Corporate DB pension Plans are almost TWICE as well funded as are US Public Sector DB pension Plans.

      The latter (Public Sector Plans) are in such poor shape, that if they were subject to the SAME Treasury/IRS Regulations as Private Sector Plans, MOST would not be allowed to grant any further pension accruals.

      Reply

    • “Under Flannery, GE announced plans in November to tackle the pension problem by taking advantage of cheap borrowing costs. GE said it will borrow $6 billion in 2018 to cover mandatory pension payments through 2020.”

      “But that doesn’t fix the problem: It’s just swapping one IOU for another.

      “It just buys you time,” said Deutsche Bank analyst John Inch.”
      —————————————
      Where have I heard that before?

      Reply

      • Posted by Tough Love on February 10, 2018 at 8:00 pm

        The BIG difference at GE and at other Private Sector Plans vs actions taken in the Public Sector, is that at GE, actions WILL BE (and HAVE BEEN) taken to rectify the situation, including lower shareholder dividends and lower employee compensation, more likely via reduced/frozen pensions & benefits than via reduced wages (although raises will certainly suffer).

        Private Sector pensions at least have workable OPTIONS …… and don’t have legal protections that FORCE employers (who in the case of the Public Sector are captive Taxpayers, not elective “shareholders”) to grant FUTURE service pension accruals for one’s entire career often no less generous that those in place on the day of hire PLUS all subsequent pension increases. How absurd ….. and a monumental abuse/betrayal of the Taxpayers.

        Those legal protections ….. ONLY afforded Public Sector workers ….. MUST end.

        Reply

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